Renting Office Space - How profitable is this business?

. 7 min read
Renting Office Space - How profitable is this business?

Books full of research are put to the test while starting a new business, and many stakeholders are involved. When you are in the first phase of starting your business, it is vital to understand every aspect of it before making any conclusive decisions. In this article, the trending business idea of renting office spaces is comprehensively analysed to check the market demand, types of businesses, and tips to make your business successful.

Keep reading to know better about this real estate business.

Market Demand for Office Space Business

Many residential properties have been found to remain vacant for years after their construction. But commercial spaces meet a different fate as their demand is mostly high. If the location is right, many companies will be more than willing to offer more than the base amount for renting out space. Today, the factors contributing to the increasing market demand for office spaces are listed below.

1. An increasing number of startups

As the number of job seekers increases every day, people understand the importance of starting their business to earn a side income. Many people have either started their part-time businesses or full-time ones to generate a strong income source for their family in the long run. These startups have the passion and ideas to fuel their growth, but their budget limitation compels them to look for small office spaces for their business. This demand has collectively resulted in an upswing in demand for commercial real estate. Even from the perspective of investment, it yields better returns (around 7%) than bank deposits (around 4%).

With the increasing number of measures taken to increase the country’s economic stability, the future seems bright for this industry. A report released by Colliers India highlights the fact that the absorption of Commercial Real Estate shot up to reach 58% by September 2020. This proves that renting office spaces is one of the unique business ideas that are profitable in the current circumstances.  

2. Discomfort in working from home

Willingly or forcibly, many employees and entrepreneurs had to start working from home. While it sounds positive, this model wouldn’t work for long as nothing matches a home’s comfort. This working arrangement has many distractions that affect the quality of work done by a professional. Controlling the noise from your neighbour’s house, asking your family members to keep it low, and focusing on your work while the kids keep traipsing in and out of your room is difficult.

This forces startups and small business owners to look for a small commercial working space to improve their work efficiency and their small team’s productivity level. Instead of gambling by signing up a lease for building space, they invest in small office desks or rooms that could temporarily support their needs.

The model of renting out office spaces is extremely popular in the global market. This can be attested by websites like ShareDesk that offer a list of companies leasing out their office spaces for commercial use. Creating a dedicated database of owners and seekers allows thousands of people to filter the list of available spaces according to their requirements to buy the right one.

Even a popular magazine like Forbes discussed the functioning of the trending business idea of renting office spaces.

woman freelancer having a strong pain in neck while working at home office

Types of Office Space Renting Businesses

By investing in this new business idea of renting office areas, you will be providing extra spaces to people in need while earning profits. You can either rent out a:  

1. Small Space

A spare desk or two in your office could be utilised for generating an additional side income. If you’re planning to start a fully-fledged commercial renting business, check out the number of offices in your city that have additional office space. Purchase those spaces to lend them to small businesses and startups that need a temporary working arrangement.

The system of renting out small spaces is also popularly known as the ‘hot desk’ arrangement. A large proportion of seekers are looking to invest in this.

2. Larger Space

To provide exclusivity for small traders and businesses, you can start lending large office spaces in commercial buildings. The initial investment in this business is higher than other models, but it could generate better ROI once you find the right tenant for your space. An individual unit in a commercial building is an example of a large office space.

Renters will be highly benefited from these types of settings as they wouldn’t have to worry about setting up an office location for professional correspondence. As the units provided on lease are already operating as offices, they would probably have their registered office address and mailbox. This could be used by the people renting small office spaces in the same location.

Tips for Attracting More Customers

Renting an office space is one of the small profitable business ideas that would result in great financial results if implemented correctly. Consider the points listed below before marketing your business.

  • Offer a monthly agreement: Startups and small businesses are looking for flexible terms of the lease as they cannot risk investing in long-term contracts. Your business will attract more renters if you offer a rolling monthly agreement. Once the deal is agreed upon, draft a lease agreement to explain the key terms.
  • Decorate your space: Most office spaces are shown to renters as storage areas. This sets a wrong impression regarding the owner and their space management. Clear the clutter and keep the desks organised to get an increased price for your space.
  • Check out your competitor’s price: Knowing the right rates for a commercial space will get you started on the right foot in the market. If you offer additional perks like proximity to important locations and private meeting rooms, your business will be able to justify the hike in prices from that of your competitors.
  • Screen the renters: Every potential renter must fill out the basic verification details through an application form. These details are:
  • Social security number
  • References
  • Business Information
  • Personal details

You can also perform a credit check of your renter to screen out the ones with a bad repayment history.

Customers Magent Attracting New People Prospects Word


When attracting customers to your business, it is essential to emphasise quality instead of quantity. You can save yourself from the unnecessary stress of taking tenants that default their payment almost every month by screening them thoroughly before leaving the property. Protect your business financially by keeping your safety deposits secure. It will help you against any financial discomfort that arises until the time your property is leased out to a tenant.

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Q. Why should I start an office space renting business?

Ans. Many startups and small businesses were launched in the second half of 2020 when the world was financially struggling with the impact of COVID-19. These businesses are searching for small office areas that could increase their productivity while giving a good physical location for business correspondence. This makes office space renting a profitable business idea.

Q. Is office space renting business profitable?

Ans. The commercial idea of renting office spaces has started gaining traction in the international and local markets. Many websites have started creating a database of owners and seekers to facilitate easy renting of spaces. This attests to the popularity of the office space renting business.

Q. How can I earn a stable income from my office?

Ans. If you have a purchased office space, it is easy to locate your space’s unused area. It could be a section of your room with 3-4 desks or an area with just one desk. Depending on space availability, you could start renting the desks to earn a stable side income from your office.

Q. How can I make my office renting business unique?

Ans. For increasing the profit generated by your office renting business, you must start providing additional services. Listed below are the value additions that would make your business attractive to seekers:

  • Physical mail system
  • Equipment support like desktops or laptops
  • Secretarial support
  • Front desk access
We hope our article turned out to be useful for you. For more such informative content, you can visit these linked articles as well:
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